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NYSE:

SCHW

SAN FRANCISCO--(BUSINESS WIRE)--The Charles Schwab Corporation announced today that its net income for
the fourth quarter of 2017 was $597 million, up 14% from $522 million
for the fourth quarter of 2016. Net income for the twelve months ended
December 31, 2017 was nearly $2.4 billion, up 25% year-over-year. The
company’s financial results for the fourth quarter and full-year 2017
were impacted by the tax reform legislation signed in December − a
one-time tax expense of approximately $46 million decreased earnings per
share by $0.03.

Three Months EndedDecember 31,

%

Twelve Months EndedDecember 31,

%

Financial Highlights

2017 (1)

2016

Change

2017 (1)

2016 (2)

Change

Net revenues (in millions)

$

2,242

$

1,972

14%

$

8,618

$

7,478

15%

Net income (in millions)

$

597

$

522

14%

$

2,354

$

1,889

25%

Diluted earnings per common share

$

.41

$

.36

14%

$

1.61

$

1.31

23%

Pre-tax profit margin

42.5

%

41.8

%

42.4

%

40.0

%

Return on average common

stockholders’ equity (annualized)

14

%

14

%

15

%

14

%

Note: All per-share results are rounded to the nearest cent, based
on weighted-average diluted common shares outstanding.

(1)

Effective January 1, 2017, a new accounting standard prospectively
changed the treatment of a portion of the tax deductions relating to
equity compensation. These deductions were previously reflected in
additional paid-in capital, a component of stockholders’ equity, and
are now included in taxes on income, a component of net income. The
company’s tax expense for the fourth quarter and full year 2017
decreased by approximately $40 million and $87 million,
respectively, as a result of this change. Future effects will depend
on the company’s share price, restricted stock vesting, and the
volume of equity incentive options exercised.

(2)

Reflects net litigation proceeds of $16 million in 2016, relating to
the company’s non-agency residential mortgage-backed securities
(RMBS) portfolio, which are included in Other revenue.

CEO Walt Bettinger said, “Our steady focus on operating ‘through
clients’ eyes’ has been a driving force in helping Schwab achieve
another record year. In 2017, clients opened 1.4 million accounts, and
households new to Schwab’s Retail business rose by 49% versus 2016; 54%
of these households were age 40 or younger. In addition, clients trusted
Schwab with a record $198.6 billion of core net new assets, up 58% from
2016 and marking a 7% organic growth rate. Both of our primary
businesses attracted record inflows, with Retail and Advisor Services
net new assets rising 57% and 59%, respectively, year-over-year. This
impressive asset gathering was helped by a 75% increase in net transfers
of assets from other firms, reflecting our strengthened competitive
position. Our success with clients was bolstered by strength in the
equity markets − the S&P 500® Index finished 2017 up 19%.
In this environment, investor sentiment reached highs not seen in almost
two decades, and clients actively engaged in the markets.”

Mr. Bettinger continued, “With a second straight top ranking in J.D.
Power’s U.S. Full-Service Investor Satisfaction Survey*, we believe that
the range of planning and advice solutions available through our modern
approach to wealth management continues to resonate with clients. Assets
enrolled in one of our retail or other advisory solutions continued to
grow faster than client assets overall, reaching a record $268.7 billion
at year-end, up 24%. In addition, our digital advisory solutions (Schwab
Intelligent Portfolios®, Institutional Intelligent Portfolios®,
and Schwab Intelligent Advisory®) have surpassed $27 billion
in client assets with 223,000 active accounts. Total client assets as of
December 31st were a record $3.36 trillion, up 21%
year-over-year. We ended 2017 serving 10.8 million active brokerage
accounts, 1.2 million banking accounts, and 1.6 million retirement plan
participants.”

Mr. Bettinger noted, “In 2017, we continued to build Schwab through our
‘Virtuous Cycle’ approach: we challenged the status quo to benefit
investors, resulting in clients entrusting us with record assets, which
helped lead to record financial results. We achieved record annual net
revenues for the fifth straight year, reaching $8.6 billion, up 15% from
2016. At the same time, we increased project spending, hired more
client-facing employees, and made ongoing investments to support the
growth we’ve achieved and to help meet client service expectations. By
once again effectively balancing near-term profitability and
reinvestment for long-term growth, we were able to deliver a fourth
consecutive year of record net income, up 25% to almost $2.4 billion. We
recognize that these results are made possible by our employees’ passion
for serving our clients every day, and in the fourth quarter we rewarded
about 9,000 of our non-executive staff with a one-time ‘Through Clients’
Eyes’ award, totaling $9 million overall.”

Mr. Bettinger added, “When Chuck Schwab started the company over 40
years ago, he sought to level the playing field for all investors. Last
year, we continued to deliver on that vision by pursuing our goal of a
‘no trade-offs’ combination of value, service, transparency, and trust.
We shared the benefits of scale with our clients by announcing nearly
$400 million in annualized price reductions. In February, we lowered
equity and options trade commissions from $8.95 to $4.95 and dropped the
per contract option fee to $0.65. We also reduced the operating expense
ratios on our market cap-weighted index mutual funds to align with their
ETF equivalents. Additionally and perhaps more importantly, we
eliminated investment minimums and multiple share classes for both
fundamental and market cap-weighted index funds, offering our best
pricing to every investor, from the smallest to the largest. At the same
time, we introduced a broad-reaching Satisfaction Guarantee, unique for
our industry.** In the fourth quarter, we streamlined share classes and
decreased operating expense ratios on our money market funds, enhancing
the net yields available to our clients. Also during the year, we
started an industry-first national advertising campaign on behalf of the
RIAs that we serve and we rolled-out Schwab Advisor StreetSmart Edge®,
providing advisors with streaming of real-time quotes, advanced
charting, and additional trading capabilities. We continued to enhance
our product offerings during 2017, adding 34 ETFs to Schwab ETF OneSource™
– investors and advisors can now buy and sell 242 ETFs covering 69
Morningstar categories. Later in the year we initiated the Schwab 1000
Index® ETF – a new low-cost way to gain exposure to America’s
largest 1,000 stocks. Additionally, we launched three index mutual
funds: Schwab® U.S. Large-Cap Value Index Fund, Schwab®
U.S. Large-Cap Growth Index Fund, and Schwab® U.S. Mid-Cap
Index Fund. On the technology front, we released a new account summary
page, allowing clients to aggregate their non-Schwab account information
on Schwab.com and enabling a more holistic view of their finances. We
are proud of the progress we made in 2017, humbled by our clients’
response, and committed to sustaining Chuck’s vision in everything we
do.”

CFO Peter Crawford commented, “Schwab’s record 2017 financial results
demonstrate the power of our financial formula working as designed: our
robust business growth supported strong revenue growth through multiple
sources, which we combined with continued expense discipline to drive
significantly improved profitability. As Walt described, our success
with clients and a favorable environment resulted in a 21% increase in
client assets. We turned this growth into a 15% lift in revenues through
record contributions from our two largest revenue sources. Net interest
revenue rose 29% to $4.3 billion due to rising interest rates as well as
growing client cash balances. Asset management and administration fees
reached a record $3.4 billion, up 11% from 2016, driven by growing
balances in advised solutions, mutual funds, and ETFs. These increases
more than offset the 21% decline in trading revenue resulting from our
pricing actions. Turning to expenses, our 11% year-over-year rise was
consistent with expectations and included higher Compensation due to
added staffing and incentive costs relating to our strong asset
gathering, as well as higher Professional services outlays relating to
project spending and third-party fees tied to higher balances in our
asset management business. Through our continued expense discipline we
achieved a 440 basis point gap between revenue and expense growth,
resulting in a record 42.4% pre-tax profit margin, a 240 basis point
expansion over last year.”

Mr. Crawford concluded, “Effective balance sheet management remains core
to supporting our success and our 2017 return on equity was 15%, the
highest since 2009. Throughout last year, we were mindful of approaching
the $250 billion consolidated asset threshold and the related
implications for heightened regulatory requirements. As we aimed for
crossing the threshold in 2018, we limited bulk transfers of sweep
balances from money market funds to Schwab Bank – which help us more
effectively optimize the spread earned on client cash – to $2.0 billion,
including approximately $1.1 billion in the fourth quarter. We also
transferred $2.9 billion of Schwab One® sweep balances, which
were already on our balance sheet, to the Bank, including $400 million
in the fourth quarter. Another part of managing our approach to $250
billion involved the utilization of Federal Home Loan Bank advances to
provide temporary funding for Bank portfolio investments that will
eventually be supported by bulk transfers. These borrowings, which
totaled $15 billion at year-end, enabled us to strengthen net interest
revenue by getting a head-start on anticipated 2018 bulk transfers while
controlling our approach to the threshold. We also worked to improve our
capital mix by replacing $485 million of 6% preferred shares with a
lower rate preferred offering, and by issuing $1.5 billion of senior
notes in advance of debt maturing in 2018 and to support continued
business growth. By month-end December, our consolidated balance sheet
reached $243 billion and our preliminary Tier 1 Leverage Ratio was 7.6%.
We ended the year poised to cross the $250 billion consolidated asset
threshold during the first half of 2018 as we continue to drive strong
balance sheet growth through a combination of asset gathering and bulk
transfers.”

Business highlights for the fourth quarter (data
as of quarter-end unless otherwise noted):

Investor Services

New retail brokerage accounts for the quarter totaled approximately
248,000, up 36% year-over-year; total accounts were 7.4 million, up
4% year-over-year.

Opened one independent branch in Germantown, WI, to bring the total to
40, continuing the company’s franchising initiative designed to make
financial advice more accessible.

Expanded Schwab OpenView Gateway®, the open architecture
platform that enables integration between Schwab systems and
technology providers, by adding eMoney for financial planning and
Addepar for portfolio management.

Products and Infrastructure

Launched new StreetSmart Central™ and StreetSmart Mobile™
Trading Platforms, marking the full integration of optionsXpress®
technology within Schwab.

*Charles Schwab received the highest numerical score in the J.D. Power
2016 and 2017 Full Service Investor Satisfaction Studies, based on 6,006
responses from 20 firms measuring opinions of investors who used
full-service investment institutions and were surveyed in January 2016
and 6,579 responses from 20 firms measuring opinions of investors who
used full-service investment institutions and were surveyed in January
2017. Your experiences may vary. Visit jdpower.com.

**Restrictions apply: The $4.95 commission does not apply to
certain transactions. All broker-assisted and automated phone trades are
subject to service charges. See the Charles Schwab Pricing Guide for
Individual Investors for full fee and commission schedules. If you
are not completely satisfied for any reason, at your request Charles
Schwab & Co., Inc. will refund any eligible fee related to your concern
within the time frames described below. Two kinds of “Fees” are eligible
for this guarantee: (1) asset-based “Program Fees” for certain
investment advisory services sponsored by Schwab; and (2) commissions
and fees listed in the Charles Schwab Pricing Guide for Individual
Investors (“Account Fees”). Program Fee refund requests must be
received no later than the next calendar quarter after the Fee was
charged. Account Fee refund requests must be received within one year of
the date that the Fee was charged.

The company has scheduled a Business Update for institutional investors
on Tuesday, February 6, 2018. The Update is scheduled to run from
approximately 8:30 a.m. - 12:15 p.m. PT, 11:30 a.m. - 3:15 p.m. ET.
Participants will include members of the company’s executive management.
A simultaneous webcast of this Update will be accessible to the public
at http://schwabevents.com/corporation.

Forward-Looking Statements

This press release contains forward-looking statements relating to the
company’s business growth; crossing the $250 billion asset threshold;
balance sheet growth; asset gathering; and bulk transfers. Achievement
of these expectations and objectives is subject to risks and
uncertainties that could cause actual results to differ materially from
the expressed expectations.

Important factors that may cause such differences include, but are not
limited to, the company’s ability to attract and retain clients and
registered investment advisors and grow those relationships and client
assets; general market conditions, including the level of interest rates
and equity valuations; competitive pressures on pricing, including
deposit rates; the company’s ability to develop and launch new products,
services and capabilities in a timely and successful manner; client use
of the company’s investment advisory services and other products and
services; the timing and amount of bulk transfers; the quality of the
company’s balance sheet assets; client sensitivity to interest rates;
regulatory guidance; and other factors set forth in the company’s most
recent reports on Form 10-K and Form 10-Q.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of
financial services, with more than 345 offices and 10.8 million active
brokerage accounts, 1.6 million corporate retirement plan participants,
1.2 million banking accounts, and $3.36 trillion in client assets as of
December 31, 2017. Through its operating subsidiaries, the company
provides a full range of wealth management, securities brokerage,
banking, money management, custody, and financial advisory services to
individual investors and independent investment advisors. Its
broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, http://www.sipc.org),
and affiliates offer a complete range of investment services and
products including an extensive selection of mutual funds; financial
planning and investment advice; retirement plan and equity compensation
plan services; referrals to independent fee-based investment advisors;
and custodial, operational and trading support for independent,
fee-based investment advisors through Schwab Advisor Services. Its
banking subsidiary, Charles Schwab Bank (member FDIC and an Equal
Housing Lender), provides banking and lending services and products.
More information is available at www.schwab.com
and www.aboutschwab.com.

THE CHARLES SCHWAB CORPORATION

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)

Three Months EndedDecember 31,

Twelve Months EndedDecember 31,

2017

2016

2017

2016

Net Revenues

Interest revenue

$

1,266

$

952

$

4,624

$

3,493

Interest expense

(119

)

(45

)

(342

)

(171

)

Net interest revenue

1,147

907

4,282

3,322

Asset management and administration fees (1)

863

801

3,392

3,055

Trading revenue

154

202

654

825

Other

78

62

290

271

Provision for loan losses

—

—

—

5

Total net revenues

2,242

1,972

8,618

7,478

Expenses Excluding Interest

Compensation and benefits

711

629

2,737

2,466

Professional services

151

134

580

506

Occupancy and equipment

113

99

436

398

Advertising and market development

63

61

268

265

Communications

60

58

231

237

Depreciation and amortization

69

61

269

234

Regulatory fees and assessments

46

42

179

144

Other

76

64

268

235

Total expenses excluding interest

1,289

1,148

4,968

4,485

Income before taxes on income

953

824

3,650

2,993

Taxes on income (2)

356

302

1,296

1,104

Net Income

597

522

2,354

1,889

Preferred stock dividends and other (3)

47

44

174

143

Net Income Available to Common Stockholders

$

550

$

478

$

2,180

$

1,746

Weighted-Average Common Shares Outstanding:

Basic

1,343

1,329

1,339

1,324

Diluted

1,358

1,341

1,353

1,334

Earnings Per Common Shares Outstanding:

Basic

$

.41

$

.36

$

1.63

$

1.32

Diluted

$

.41

$

.36

$

1.61

$

1.31

Dividends Declared Per Common Share

$

.08

$

.07

$

.32

$

.27

(1)

Includes fee waivers of $0 million and $31 million during the fourth
quarters of 2017 and 2016, respectively, and $10 million and $224
million during the twelve months ended December 31, 2017 and 2016,
respectively, relating to Schwab-sponsored money market funds.

(2)

Taxes on income were reduced by approximately $40 million and $87
million for the three and twelve months ended December 31, 2017 to
reflect the required adoption of Accounting Standards Update
2016-09, which changes the accounting treatment of a portion of the
tax deductions relating to equity compensation. Taxes on income were
also increased by approximately $46 million in December 2017 due to
the enactment of the Tax Cuts and Jobs Act legislation resulting in
the remeasurement of deferred tax assets and other tax adjustments.

Return on average common stockholders’ equity is calculated
using net income available to common stockholders divided by average
common stockholders’ equity.

(2)

Includes all client trades that generate trading revenue (i.e.,
commission revenue or principal transaction revenue); also known as
DART.

(3)

Includes eligible trades executed by clients who participate in one
or more of the Company’s asset-based pricing relationships.

(4)

Includes all commission-free trades, including Schwab Mutual Fund
OneSource® funds and ETFs, and other proprietary products.

N/M

Not meaningful.

THE CHARLES SCHWAB CORPORATION

Net Interest Revenue Information

(In millions)

(Unaudited)

Three Months EndedDecember 31,

Twelve Months EndedDecember 31,

2017

2016

2017

2016

AverageBalance

InterestRevenue/Expense

AverageYield/Rate

AverageBalance

InterestRevenue/Expense

AverageYield/Rate

AverageBalance

InterestRevenue/Expense

AverageYield/Rate

AverageBalance

InterestRevenue/Expense

AverageYield/Rate

Interest-earning assets:

Cash and cash equivalents

$

11,582

$

37

1.27

%

$

10,052

$

13

0.51

%

$

9,931

$

109

1.10

%

$

11,143

$

57

0.51

%

Cash and investments segregated

15,307

46

1.19

%

21,047

28

0.53

%

18,525

166

0.90

%

20,104

93

0.46

%

Broker-related receivables

438

1

0.91

%

493

1

0.27

%

430

3

0.70

%

558

1

0.22

%

Receivables from brokerage clients

17,478

160

3.63

%

15,145

125

3.28

%

16,269

575

3.53

%

15,001

497

3.31

%

Available for sale securities (1)

47,016

200

1.69

%

76,624

247

1.28

%

53,040

815

1.54

%

72,586

883

1.22

%

Held to maturity securities

115,694

663

2.27

%

68,351

396

2.30

%

103,599

2,354

2.27

%

57,451

1,402

2.44

%

Bank loans

16,378

125

3.03

%

15,148

103

2.71

%

15,919

472

2.97

%

14,715

400

2.72

%

Total interest-earning assets

223,893

1,232

2.18

%

206,860

913

1.76

%

217,713

4,494

2.06

%

191,558

3,333

1.74

%

Other interest revenue

34

39

130

160

Total interest-earning assets

$

223,893

$

1,266

2.24

%

$

206,860

$

952

1.83

%

$

217,713

$

4,624

2.12

%

$

191,558

$

3,493

1.82

%

Funding sources:

Bank deposits

$

165,552

$

50

0.12

%

$

154,357

$

11

0.03

%

$

163,998

$

148

0.09

%

$

141,432

$

37

0.03

%

Payables to brokerage clients

23,038

5

0.09

%

27,141

1

0.01

%

25,403

16

0.06

%

26,311

3

0.01

%

Short-term borrowings

9,520

30

1.25

%

2,429

3

0.49

%

3,503

41

1.17

%

1,864

9

0.48

%

Long-term debt

3,671

30

3.24

%

2,876

26

3.60

%

3,431

119

3.47

%

2,876

104

3.62

%

Total interest-bearing liabilities

201,781

115

0.23

%

186,803

41

0.09

%

196,335

324

0.17

%

172,483

153

0.09

%

Non-interest-bearing funding sources

22,112

20,057

21,378

19,075

Other interest expense

4

4

18

18

Total funding sources

$

223,893

$

119

0.21

%

$

206,860

$

45

0.09

%

$

217,713

$

342

0.15

%

$

191,558

$

171

0.09

%

Net interest revenue

$

1,147

2.03

%

$

907

1.74

%

$

4,282

1.97

%

$

3,322

1.73

%

(1)

Amounts have been calculated based on amortized cost.

THE CHARLES SCHWAB CORPORATION

Asset Management and Administration Fees Information

(In millions)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2017

2016

2017

2016

AverageClientAssets

Revenue

AverageFee

AverageClientAssets

Revenue

AverageFee

AverageClientAssets

Revenue

AverageFee

AverageClientAssets

Revenue

AverageFee

Schwab money market funds before fee waivers

$

162,249

$

200

0.49

%

$

162,207

$

238

0.58

%

$

160,735

$

875

0.54

%

$

164,120

$

962

0.59

%

Fee waivers

—

(31

)

(10

)

(224

)

Schwab money market funds

162,249

200

0.49

%

162,207

207

0.51

%

160,735

865

0.54

%

164,120

738

0.45

%

Schwab equity and bond funds and ETFs

179,764

60

0.13

%

125,814

57

0.18

%

158,625

223

0.14

%

115,849

217

0.19

%

Mutual Fund OneSource ® and other

non-transaction fee funds

219,157

178

0.32

%

198,289

168

0.34

%

215,333

706

0.33

%

199,389

676

0.34

%

Other third-party mutual funds and ETFs (1)

309,007

69

0.09

%

264,703

59

0.09

%

286,111

251

0.09

%

254,584

222

0.09

%

Total mutual funds and ETFs (2)

$

870,177

507

0.23

%

$

751,013

491

0.26

%

$

820,804

2,045

0.25

%

$

733,942

1,853

0.25

%

Advice solutions (2) :

Fee-based

$

216,546

278

0.51

%

$

184,007

237

0.51

%

$

203,794

1,043

0.51

%

$

177,409

915

0.52

%

Non-fee based

55,368

—

—

38,714

—

—

48,936

—

—

35,262

—

—

Total advice solutions

$

271,914

278

0.41

%

$

222,721

237

0.42

%

$

252,730

1,043

0.41

%

$

212,671

915

0.43

%

Other balance-based fees (3)

$

451,310

66

0.06

%

$

349,610

59

0.07

%

$

417,659

258

0.06

%

$

339,071

235

0.07

%

Other (4)

12

14

46

52

Total asset management and administration fees

$

863

$

801

$

3,392

$

3,055

(1)

Includes Schwab ETF OneSource™.

(2)

Advice solutions include managed portfolios, specialized strategies,
and customized investment advice such as Schwab Private Client,
Schwab Managed Portfolios, Managed Account Select®,
Schwab Advisor Network®, Windhaven® Strategies,
ThomasPartners® Strategies, Schwab Index Advantage®
advised retirement plan balances, Schwab Intelligent Portfolios®,
Institutional Intelligent Portfolios®, and Schwab
Intelligent Advisory®, launched in March 2017; as well as
legacy non-fee advice solutions including Schwab Advisor Source and
certain retirement plan balances. Beginning in the fourth quarter of
2017, a prospective change was made to add non-fee based average
assets from managed portfolios. Average client assets for advice
solutions may also include the asset balances contained in the
mutual fund and/or ETF categories listed above. For a total end of
period view, please see the Monthly Activity Report.

(3)

Includes various asset-related fees, such as trust fees, 401(k)
recordkeeping fees, and mutual fund clearing fees and other service
fees. Beginning in the first quarter of 2017, a prospective
methodology change was made to average client assets relating to
401(k) recordkeeping fees to provide improved insight into the
associated fee driver, which resulted in an increase of
approximately $25 billion. There was no impact to revenue or the
average fee.

(4)

Includes miscellaneous service and transaction fees relating to
mutual funds and ETFs that are not balance-based.

THE CHARLES SCHWAB CORPORATION

Growth in Client Assets and Accounts

(Unaudited)

Q4-17 % Change

2017

2016

vs.

vs.

Fourth

Third

Second

First

Fourth

(In billions, at quarter end, except as noted)

Q4-16

Q3-17

Quarter

Quarter

Quarter

Quarter

Quarter

Assets in client accounts

Schwab One®, certain cash equivalents and bank deposits

1

%

2

%

$

198.6

$

195.0

$

193.7

$

199.6

$

197.4

Proprietary mutual funds (Schwab Funds® and Laudus Funds®):

Money market funds

—

3

%

163.6

159.2

156.2

162.9

163.5

Equity and bond funds (1)

25

%

7

%

82.5

77.3

73.3

70.1

66.1

Total proprietary mutual funds

7

%

4

%

246.1

236.5

229.5

233.0

229.6

Mutual Fund Marketplace® (2)

Mutual Fund OneSource® and other non-transaction fee funds

13

%

2

%

225.2

221.2

224.7

204.9

198.9

Mutual fund clearing services

35

%

12

%

265.4

236.5

226.4

197.5

196.6

Other third-party mutual funds

22

%

5

%

682.6

652.5

609.0

596.2

558.2

Total Mutual Fund Marketplace

23

%

6

%

1,173.2

1,110.2

1,060.1

998.6

953.7

Total mutual fund assets

20

%

5

%

1,419.3

1,346.7

1,289.6

1,231.6

1,183.3

Exchange-traded funds (ETFs)

Proprietary ETFs (1)

66

%

13

%

99.1

87.8

78.0

69.3

59.8

ETF OneSource™ (2)

35

%

8

%

28.7

26.6

24.9

23.1

21.2

Other third-party ETFs

30

%

8

%

308.8

286.7

270.2

257.0

238.3

Total ETF assets

37

%

9

%

436.6

401.1

373.1

349.4

319.3

Equity and other securities

22

%

6

%

1,080.0

1,016.9

971.4

939.7

886.5

Fixed income securities

18

%

3

%

245.6

238.4

229.3

217.5

208.3

Margin loans outstanding

20

%

8

%

(18.3

)

(16.9

)

(16.5

)

(15.3

)

(15.3

)

Total client assets

21

%

6

%

$

3,361.8

$

3,181.2

$

3,040.6

$

2,922.5

$

2,779.5

Client assets by business

Investor Services

21

%

6

%

$

1,810.9

$

1,707.0

$

1,634.1

$

1,565.9

$

1,495.4

Advisor Services

21

%

5

%

1,550.9

1,474.2

1,406.5

1,356.6

1,284.1

Total client assets

21

%

6

%

$

3,361.8

$

3,181.2

$

3,040.6

$

2,922.5

$

2,779.5

Net growth in assets in client accounts (for the quarter
ended)

Net new assets by business

Investor Services (3)

N/M

98

%

$

46.4

$

23.4

$

39.9

$

14.0

$

13.7

Advisor Services

37

%

12

%

31.7

28.2

24.6

24.9

23.2

Total net new assets

112

%

51

%

$

78.1

$

51.6

$

64.5

$

38.9

$

36.9

Net market gains

N/M

15

%

102.5

89.0

53.6

104.1

17.3

Net growth

N/M

28

%

$

180.6

$

140.6

$

118.1

$

143.0

$

54.2

New brokerage accounts (in thousands, for the quarter ended)

32

%

15

%

386

336

357

362

293

Clients (in thousands)

Active Brokerage Accounts

6

%

2

%

10,755

10,565

10,487

10,320

10,155

Banking Accounts

8

%

2

%

1,197

1,176

1,143

1,120

1,106

Corporate Retirement Plan Participants

2

%

1

%

1,568

1,552

1,540

1,545

1,543

(1)

Includes proprietary equity and bond funds and ETFs held on and off
the Schwab platform. As of December 31, 2017, off-platform equity
and bond funds and ETFs were $10.1 billion and $24.0 billion,
respectively.

(2)

Excludes all proprietary mutual funds and ETFs.

(3)

Fourth quarter of 2017 includes an inflow of $16.2 billion from a
mutual fund clearing services client. Second quarter of 2017
includes inflows of $18.3 billion from a mutual fund clearing
services client. First quarter of 2017 includes an outflow of $9.0
billion from a mutual fund clearing services client.

N/M Not meaningful.

- -

The Charles Schwab Corporation Monthly Activity Report For
December 2017

2016

2017

Change

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Mo.

Yr.

Market Indices

(at month end)

Dow Jones Industrial Average

19,763

19,864

20,812

20,663

20,941

21,009

21,350

21,891

21,948

22,405

23,377

24,272

24,719

2

%

25

%

Nasdaq Composite

5,383

5,615

5,825

5,912

6,048

6,199

6,140

6,348

6,429

6,496

6,728

6,874

6,903

—

28

%

Standard & Poor’s 500

2,239

2,279

2,364

2,363

2,384

2,412

2,423

2,470

2,472

2,519

2,575

2,648

2,674

1

%

19

%

Client Assets

(in billions of dollars)

Beginning Client Assets

2,734.6

2,779.5

2,831.3

2,895.2

2,922.5

2,948.8

2,995.8

3,040.6

3,099.9

3,122.3

3,181.2

3,256.5

3,318.8

Net New Assets (1)

18.9

11.1

6.6

21.2

2.8

24.0

37.7

15.8

18.0

17.8

35.4

15.7

27.0

72

%

43

%

Net Market Gains

26.0

40.7

57.3

6.1

23.5

23.0

7.1

43.5

4.4

41.1

39.9

46.6

16.0

Total Client Assets (at month end)

2,779.5

2,831.3

2,895.2

2,922.5

2,948.8

2,995.8

3,040.6

3,099.9

3,122.3

3,181.2

3,256.5

3,318.8

3,361.8

1

%

21

%

Receiving Ongoing Advisory Services

(at month end)

Investor Services

217.1

220.8

227.9

230.9

234.4

239.1

242.2

247.2

249.9

255.0

259.8

265.1

268.7

1

%

24

%

Advisor Services (2)

1,184.3

1,208.4

1,239.0

1,250.9

1,262.7

1,283.4

1,297.6

1,323.8

1,333.1

1,358.6

1,382.6

1,410.8

1,431.1

1

%

21

%

Client Accounts

(at month end, in thousands)

Active Brokerage Accounts (3)

10,155

10,198

10,254

10,320

10,386

10,439

10,487

10,477

10,525

10,565

10,603

10,671

10,755

1

%

6

%

Banking Accounts

1,106

1,109

1,117

1,120

1,128

1,138

1,143

1,154

1,167

1,176

1,181

1,192

1,197

—

8

%

Corporate Retirement Plan Participants

1,543

1,543

1,534

1,545

1,543

1,541

1,540

1,540

1,550

1,552

1,556

1,564

1,568

—

2

%

Client Activity

New Brokerage Accounts (in thousands)

116

111

113

138

125

115

117

107

123

106

117

122

147

20

%

27

%

Inbound Calls (in thousands)

1,931

1,817

1,787

2,111

1,788

1,727

1,736

1,683

1,823

1,709

1,988

1,804

2,046

13

%

6

%

Web Logins (in thousands)

40,720

40,047

40,717

45,441

39,750

44,024

43,790

42,236

47,290

39,639

51,454

50,583

54,486

8

%

34

%

Client Cash as a Percentage of Client Assets (4)

13.0

%

12.7

%

12.4

%

12.4

%

12.1

%

11.8

%

11.5

%

11.3

%

11.4

%

11.1

%

10.9

%

10.8

%

10.8

%

—

(220) bp

Mutual Fund and Exchange-Traded Fund

Net Buys (Sells) (5, 6)

(in millions of dollars)

Large Capitalization Stock

565

265

580

(125

)

346

134

(63

)

(95

)

(1,683

)

(138

)

(51

)

85

1,023

Small / Mid Capitalization Stock

1,103

1,364

673

(409

)

(797

)

(285

)

(322

)

(139

)

(293

)

45

378

(144

)

274

International

(683

)

1,296

1,633

1,703

2,410

3,610

3,631

2,675

1,705

1,549

1,913

2,627

1,852

Specialized

20

411

1,007

273

570

529

647

236

279

465

655

58

424

Hybrid

(456

)

(53

)

258

563

92

65

(340

)

142

(272

)

460

(118

)

(263

)

307

Taxable Bond

1,045

3,144

3,535

3,876

2,060

3,618

3,499

3,064

3,481

3,809

3,466

2,389

2,561

Tax-Free Bond

(1,692

)

864

472

300

155

290

507

453

715

494

452

371

341

Net Buy (Sell) Activity

(in millions of dollars)

Mutual Funds (5)

(5,825

)

2,522

4,005

2,368

1,116

3,837

2,980

3,201

1,048

3,002

2,401

882

775

Exchange-Traded Funds (6)

5,727

4,769

4,153

3,813

3,720

4,124

4,579

3,135

2,884

3,682

4,294

4,241

6,007

Money Market Funds

1,141

(1,761

)

(181

)

1,218

(4,434

)

(1,167

)

(1,260

)

1,022

2,105

(374

)

213

1,166

2,968

Average Interest-Earning Assets (7)

(in millions of dollars)

212,052

216,001

216,112

218,554

217,407

215,252

214,709

212,108

214,458

216,472

219,658

223,292

228,540

2

%

8

%

(1)

October 2017 includes an inflow of $16.2 billion from a mutual fund
clearing services client. June 2017 includes an inflow of $15.6
billion from a mutual fund clearing services client. February 2017
includes an outflow of $9.0 billion from a mutual fund clearing
services client.

(2)

Excludes Retirement Business Services.

(3)

Periodically, the Company reviews its active account base. In July
2017, active brokerage accounts were reduced by approximately 48,000
as a result of low-balance closures.